Why Don’t College Coaches Have Non-Competes in Their Contracts?

It’s the beginning of December and it’s time to play college coaching dominoes once more. Down goes one coach, up pops another one, and so on and so forth across the sweep of our nation. Already we either have or had major job openings at UCLA, North Carolina, Arizona, Arizona State, Washington State, Penn State, Ole Miss and more. It’s an annual rite of passage in college football and basketball, indeed, at times, it appears the Internet was made simply to explore coaching rumor after coaching rumor. We’ve gotten so used to the yearly coaching carousel that we’ve hardly even asked a really interesting question — how did we end up in a universe where college coaches could switch from one team to another with virtually no restriction?

In other words, how the hell do college coaching contracts not include non-compete provisions?

It’s completely illogical that these contracts don’t. Successful college coaches are the most valuable members of their profession, gridiron CEO’s, men whose value extends far beyond their paychecks. The right college coach is worth his weight in gold, literally. They’re highly skilled professionals who drive the success of their programs, develop relationships with the assets — recruits — that are connected to them rather than the university, yet not one single college coach has a truly restrictive non-compete provision in his contract.

It would be unthinkable for the CEO of Coke to leave an old job on Sunday and take over at Pepsi on Monday. Yet Nick Saban could, if he wanted to, take over the reigns of Auburn’s football program one day after leading Alabama’s. And not just that. He could also take all of the best assets destined for Alabama — top players — and have them follow him a la John Calipari to his new destination. It’s as if Coke’s CEO could join Pepsi and take the hottest new product that Coke was prepared to introduce along with him.

That’s insane!

Yet no one even talks about this. At all. You’ll hear a billion words about coaching jobs this offseason and no one will mention how it’s possible for coaches to break their contracts and leave to take new jobs at competing schools. (By the way, I don’t begrudge coaches for doing this. More power to the individual. I just think it’s interesting that no one writes or talks about this issue. We’ve all just gotten so used to it that no one asks why coaches of non-profit entities have somehow found themselves in the purest free market economy in American business. For instance, what John Calipari did to Memphis could never happen in American business. If it did, there would be a half-decade of litigation and tens of millions in damages).

As a background, a non-compete is simple, when you sign a contract you agree not to be employed by rivals for a specific period of time. Lots of y’all reading this column right now have non-competes. Hell, I have a radio non-compete, a book non-compete, and until FanHouse folded I also had a column non-compete. And I’m far from the Nick Saban of sports media. Every single ESPN employee you see on television, every single CBS, Yahoo, or Sports Illustrated writer you read, basically anyone whose content you consume in the world of sports who is affiliated with a major media entity has a non-compete provision of his or her contract.

Think about this, the writers writing about college coaching moves have non-competes and the coaches they’re writing about don’t.

How backwards is that?

ESPN’s Kirk Herbstreit can’t just show up on Fox tomorrow. If he even attempted to do it, ESPN would wage litigation war on Fox. The non-compete is such a fundamental part of all skilled employee contracts that most major companies wouldn’t think of failing to include one. That’s why you’re not turning on late night talk shows and seeing David Letterman on CBS one day and NBC the next.

Everyone has a non-compete. (When contracts expire media members can become free agents, but not until those multi-year contracts expire. And even then non-competes often govern. Which is why you had to wait, for instance, before Conan O’Brien could take over his new show on TBS).

Non-competes are incredibly common for athletes as well.

What if after every single football season Tom Brady could put his services up for auction to the highest bidder? The idea is ludicrous, right?

Yet that’s what college coaches can do every year.

CEO’s, high-ranked executives at companies, hell, most sales staff out there have noncompetes. They’re incredibly common and the rationale for why they exist is simple — to protect the companies that are paying such substantial salaries to their best and most important employees from inside competition.

The NFL, the NBA, Major League Baseball, the NHL, every major league sport has non-competes for its coaches as well. Once you sign a contract you’re locked to that team for the length of that contract. That’s why when Jon Gruden jumped from Oakland to Tampa Bay the Bucs had to compensate the Raiders for his loss. It’s why when Bill Cowher left the Pittsburgh Steelers he couldn’t immediately take over another NFL team. The only sport in America where non-competes don’t exist is college sports. It’s why guys have such vagabond existences in college athletics, a contract really isn’t a contract at all.

Unless, that is, a coach gets fired. Then he gets the entire total of his contract. So college coaches don’t have to honor the entirety of their contracts if they’re good enough to leave for something better but the schools do if they’re so bad they get fired.

Just, wow.

(To forestall these emails, a non-compete is not a buyout. A buyout is simply a fee paid to break a contract. Most buyouts are insignificant in nature. That is, they don’t really act as obstacles either. A buyout is a poor substitute for a non-compete since if a school really wants someone bad enough it will simply buy them away).

The simple fact is this: no other highly-skilled professionals in American life make as much money with as little restriction on movement as college coaches. And that’s a big reason why coaching salaries are escalating so rapidly, because coaches can leap at any moment so there’s a continual arm’s race. How fast are coaching salaries escalating? Look at the growth rate since 1996 when Steve Spurrier became the first college coach to make $1 million a year. One year later, Spurrier locked down an extension that would see his salary cross the $2-million threshold by 1999. In 2006, Oklahoma’s Bob Stoops became the first coach to top $3 million a year. By 2008, at the latest, the $4-million barrier fell to USC’s Pete Carroll. In 2011, Bob Stoops and Mac Brown made over $5 million and Nick Saban made north of $6 million if you include his bonus.

The march through each million-dollar barrier makes news, but the story they miss is this: Where are we headed in five, 10, 15, or even 25 years? In the past 16 years, we’ve seen the high water mark for coaching salaries quintuple. From Spurrier’s million-dollar contract in 1996, there are now over 70 million-dollar coaches.

Using this data set, I farmed out the numbers to a Ph.D. of mathematics, my buddy Chris Shaw. He indexed the numbers for inflation, assigned data values that I still don’t understand (because I’m a math idiot) and predicted that, by 2026, another 15 years from a high water mark of $5 million in 2011, the top coach in America will be earning $23.7 million.

And by 2035, the top coach in America will hit $50 million per year.

Much of that growth will come because coaches don’t have non-competes in their contracts and those lack of non-competes means that every offseason is a coaching hiring frenzy. Top coaches are the only highly skilled perpetual free agents in America today.

And no one questions this at all.

Remember when kids wanted to grow up to be professional athlete’s agents? To heck with that. Being an agent for college coaches is where the money really is. You get a new deal every year.

But at some point don’t college presidents — nervous about the skyrocketing cost of coaching salaries and perpetual coaching free agency in a non-profit industry — have to change this dynamic? After all, it’s a systemic issue that requires a systemic response. One school can’t insist on a non-compete if no other schools are insisting either.

You’d think someone would take an action.

But so far the silence is deafening and the twenty million dollar a year college coach inches closer and closer. In fact, you know what the only thing crazier than a twenty million dollar a year coach? The fact that the twenty million dollar a year coach could be at Ohio State one day and at Michigan the next day.